Buying or Selling a Restaurant

Buying or Selling a Restaurant

Is there a formula for estimating the worth of a Restaurant?I am not buying or selling just trying to settle a arguement on how it is all figured out. I say gross sales over 5 or 10 years added together then divided by number of years.

there are three different formulas that i used to determine the worth of my place before i listed it for sale. i then used the middle numbers. the most practical is that one year gross sales= sell price. there are many factors that come into play such as real estate, leases, age of equipment, condition of building and equipment, and tons of other things. ultimately, a business is worth whatever someone is willing to pay for it, same as a house. my restaurant is for sell, if anyone is interested......